OIG Calls for More Scrutiny of Medicare Hospital Outlier Payments

"We found that 16 of the 746 of the MS-DRG (Medical Severity-Diagnostic Related Group" accounted for over 40% of outlier payments" and that "13 MS-DRGs had outlier payments on at least 25% of each MS-DRG claims, one of which had outlier payments on 37% of its claims.

"This suggests that certain MS-DRGs may result in outlier payments for reasons inherent to the MS-DRG, rather than for extraordinarily costly cases."

CMS said in response that it concurs with the OIG's three recommendations.

The OIG said that it was "beyond the scope" of its investigation to determine why certain hospitals charge so much more than other hospitals for taking care of the same type of patient, " or how their submitted charges related to the actual cost of patient care.

"In some cases, high charges could be the result of high costs because some hospitals attract a disproportionate share of exceptionally costly patients or apply costly technologies and treatments. Still, the routine receipt of outlier payments for certain MS-DRGs at high-outlier hospitals raises concerns about why charges and estimated costs for similar patient-care cases vary substantially across hospitals."

Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.